Cora Bucklin v. Zurich American Insurance Co , 619 F. App'x 574 ( 2015 )

FILED
NOT FOR PUBLICATION JUL 20 2015
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
CORA BUCKLIN, an individual on behalf No. 13-56085
of herself and on behalf of all persons
similarly situated and VIRGINIA L. D.C. No. 2:11-cv-05519-SVW-
BURTON, an individual on behalf of MRW
herself and on behalf of all persons
similarly situated,
MEMORANDUM*
Plaintiffs - Appellants,
v.
ZURICH AMERICAN INSURANCE
COMPANY,
Defendant - Appellee.
Appeal from the United States District Court
for the Central District of California
Stephen V. Wilson, District Judge, Presiding
Argued and Submitted June 4, 2015
Pasadena, California
Before: M. SMITH and N.R. SMITH, Circuit Judges and LEFKOW,** Senior
District Judge.
*
This disposition is not appropriate for publication and is not precedent except as
provided by 9th Cir. R. 36-3.
**
The Honorable Joan H. Lefkow, Senior United States District Judge
for the Northern District of Illinois, sitting by designation.
I. Appellants Are Exempt Administrative Employees
Appellants Cora Bucklin and Virginia Burton appeal the district court’s
grant of summary judgment to appellee Zurich American Insurance Company
(“Zurich”). The district court found that appellants were properly classified as
exempt administrative employees. We have jurisdiction under 28 U.S.C. § 1291
and affirm.
“We review a district court’s decision to grant summary judgment de novo.”
Carver v. Holder, 606 F.3d 690, 695 (9th Cir. 2010) (citation omitted). We
therefore view the evidence in the light most favorable to the nonmoving party and
determine “whether there are any genuine issues of material fact and whether the
district court correctly applied the relevant substantive law.” Suzuki Motor Corp.
v. Consumers Union of U.S., Inc., 330 F.3d 1110, 1131–32 (9th Cir. 2003) (citation
omitted).
To classify an employee under the administrative exemption, an employer
must establish the following five elements:
1. The employee performs work directly related to
management policies or general business operations
of either the employer or the employer’s clients;
2. The employee customarily and regularly exercises
discretion and independent judgment;
2
3. The employee works under only general supervision
while performing work along specialized or technical
lines requiring special training, experience, or
knowledge;
4. The employee is primarily engaged in exempt work
meeting the above requirements; and
5. The employee meets a minimum salary requirement.
See Campbell v. PricewaterhouseCoopers, LLP, 642 F.3d 820, 831 (9th Cir. 2011)
(citing Cal. Code Regs. tit. 8, § 11040(1)(A)(2)).
Unlike the facts in Campbell, there are no genuine issues of material fact as
to what appellants actually do and what Zurich expects them to do. See id. at 832.
Thus, whether appellants’ duties satisfy the elements of the exemption is a question
of law properly decided by the district court. See Cleveland v. City of L.A., 420
F.3d 981, 988 (9th Cir. 2005) (“A district court’s determinations regarding
exemptions to the FLSA are questions of law that we review de novo.” (citation
omitted)).
Undisputed facts demonstrate that appellants primarily performed work
directly related to Zurich’s management policies or general business operations.
Cal. Code Regs. tit. 8, § 11040(1)(A)(2)(a)(I). Appellants developed a plan of
action for resolving each claim and represented Zurich while investigating claims,
setting reserves, directing litigation, and negotiating settlements. They also made
3
recommendations to their supervisors when necessary, and those recommendations
were frequently accepted. These duties qualify as servicing a business, 29 C.F.R. §
541.205(b) (2001),1 and were therefore qualitatively administrative.2 Harris v.
Superior Court, 266 P.3d 953, 959 (Cal. 2011).
Further, appellants’ authority to set reserves and to settle claims up to
specified amounts indicates that their duties were substantially important to
Zurich’s business operations. See 29 C.F.R. § 541.205(a). Accordingly,
appellants’ duties were quantitatively administrative as well. Harris, 266 P.3d at
959; see also 29 C.F.R. § 541.205(c)(5) (identifying claim agents and adjusters as
an example of the kind of employee who meets the quantitative component). The
mere fact that appellants performed some clerical duties and described their duties
as routine does not create a triable issue on the quantitative component of the
directly related requirement.
1
In construing the administrative exemption, we apply the 2001 version of the federal
regulations. See Cal. Code Regs. tit. 8, § 11040(1)(A)(2)(f) (“The activities constituting exempt
work and non-exempt work shall be construed in the same manner as such terms are construed in
the following regulations under the Fair Labor Standards Act effective as of the date of this
order: 29 C.F.R. Sections 541.201–205, 541.207–208, 541.210, and 541.215.”).
2
Appellants argue that the California Court of Appeal’s decision in Harris v. Superior
Court, 144 Cal. Rptr. 3d 289 (Ct. App. 2012), compels the conclusion that an issue of fact
remains on the qualitative component. That decision, however, was ordered depublished by the
California Supreme Court and thus has no precedential value. See Farmers Ins. Exch. v.
Superior Court, 159 Cal. Rptr. 3d 580, 591–92 (Ct. App. 2013).
4
Appellants customarily and regularly exercised discretion and independent
judgment. Cal. Code Regs. tit. 8, § 11040(1)(A)(2)(b). In setting reserve amounts,
appellants considered a number of factors such as the nature and extent of the
injury and the likelihood of permanent disability. When litigation became
necessary, appellants retained an attorney on behalf of Zurich, developed a
litigation strategy, and, when appropriate, settled the case. Thus, appellants’ duties
entailed “the comparison and the evaluation of possible courses of conduct and
acting or making a decision after the various possibilities have been considered.”
29 C.F.R. § 541.207(a).
An obligation to utilize specific computer programs or to refer to reference
manuals and guidelines does not necessarily prevent an employee from exercising
independent discretion or judgment. In re Farmers Ins. Exch., Claims
Representatives’ Overtime Pay Litig., 481 F.3d 1119, 1130–31 (9th Cir. 2007).
That appellants’ discretion was restricted by Zurich’s best practices manual does
not negate the undisputed fact that appellants regularly exercised discretion and
independent judgment in setting reserves and directing litigation.
Appellants made recommendations to their supervisors that were frequently
accepted, supporting the conclusion that appellants exercised discretion and
judgment. See 29 C.F.R. § 541.207(e)(1) (“The decisions made as a result of the
5
exercise of discretion and independent judgment may consist of recommendations
for action rather than the actual taking of action.”). And supervisory review of
appellants’ discretionary decisions does not change the fact that appellants
exercised independent judgment in the first instance. Indeed, appellants had
substantial discretion when acting within their settlement authority.
Appellants performed under only general supervision work along specialized
or technical lines requiring special training, experience, or knowledge. Cal. Code
Regs. tit. 8, § 11040(1)(A)(2)(d). Appellants acknowledge that they engaged in
work along specialized or technical lines, and appellants rarely operated under
direct supervision. At most, appellants’ supervisors reviewed their discretionary
decisions after the fact. Thus, this case is readily distinguishable from our decision
in Campbell where the record contained “a wealth of . . . extensive conflicting
evidence” about the scope of PwC’s supervision over the plaintiffs. 642 F.3d at
832. Here, disputed facts do not bear heavily on whether appellants are exempt;
instead, the undisputed facts establish that there is no triable issue on this element.
Finally, appellants do not dispute that they were primarily engaged in duties
that meet the test of the exemption, Cal. Code Regs. tit. 8, § 11040(1)(A)(2)(f), or
that they earned more than twice the state minimum wage, id. § 11040(1)(A)(2)(g).
6
Because there are no genuine issues of material fact as to any elements of the
administrative exemption, we affirm the grant of summary judgment to Zurich.
II. The District Court Did Not Abuse Its Discretion in Striking Appellants’
Expert Report
We review the grant of a motion to strike for an abuse of discretion.
Hambleton Bros. Lumber Co. v. Balkin Enters., Inc., 397 F.3d 1217, 1224 n.4 (9th
Cir. 2005) (citations omitted). Although the schedule for expert witness
disclosures postdated briefing on the motion for summary judgment, appellants did
not request under Fed. R. Civ. P. 56(d) an order allowing expert discovery before
responding to the motion, leaving Zurich without the opportunity to investigate or
depose the witness. Moreover, a trial court can only consider admissible evidence
in ruling on a motion for summary judgment. Beyene v. Coleman Sec. Servs., Inc.,
854 F.2d 1179, 1181 (9th Cir. 1988). Because appellants’ expert’s report was not
sworn when filed, the district court did not abuse its discretion in declining to
consider it. See Fed. R. Civ. P. 56(c)(4), (e); Fed. R. Evid. 901, 902. Finally, the
report is merely the expert’s opinion as to the proper classification of appellants
under governing law, which, as indicated, is a question of law reserved for the
court.
AFFIRMED.
7